Cloud Spending Will Soar as Enterprise Reliance on SaaS Grows: IDC

Enterprises will continue to increase their spending on a variety of cloud services, including Platform as a Service, (PaaS) Infrastructure as a Service (SaaS) and Software as a Service (Saas) applications for at least the next three, according to an IDC market report. The cloud services boom will start in 2018 with an estimated 23.2 percent increase in spending over 2017, according to IDC. The IDC study is nothing but good news for cloud vendors as the work to fill hefty enterprise demand through at least 2021. This slide show will shed some light on where enterprises will allocate their cloud computing budget.

The global public cloud services and infrastructure industry is set for impressive growth in 2018. According to data from IDC, which comes from an analysis of 20 industries across 47 countries, total spending this year will reach $160 billion, a 23.2 percent jump over 2017.

IDC believes cloud spending will continue to grow. By 2021, IDC estimates that public cloud services spending will reach $277 billion. This would amount to a compound annual growth rate between 2018 and 2021 of 21.9 percent. 

The U.S. spends far more on cloud services than any other country. In 2018, total U.S.-based company spending will reach $97 billion, accounting for more than 60 percent of global spending. It will be followed by the U.K. and Germany, which will tally $7.9 billion and $7.4 billion in spending, respectively. China cloud spending will hit $5.4 billion.

In an analysis of how U.S.-based companies will acquire cloud services in 2018, IDC found that discrete manufacturing, professional services, and banking industries will be the top spenders. Collectively, they’ll account for one-third of total U.S. public cloud services spending in 2018. That amounts to about $33 billion.

Moving to a global analysis of popular services, IDC said that Software as a Service (SaaS) will attract the most companies and account for about two-thirds of public cloud spending this year. In total, SaaS spending should exceed $100 billion worldwide.

According to IDC, companies that acquire SaaS solutions this year will focus on applications and system infrastructure software. Application purchases will account for more than half of SaaS purchases through 2019. Enterprise resource management and customer relationship management services will attract the most demand.

Infrastructure as a Service (IaaS) will capture the second spot in total spending this year, followed by Platform as a Service (PaaS), IDC found. The company didn’t say how much each category will generate in revenue, but said that server and storage spending will be most important to IaaS shoppers. On the PaaS side, look for data management software to attract the most demand.

With an eye on worldwide spending, IDC examined which industries will spend the most on cloud services this year. The researcher said that discrete manufacturers will spend $19.7 billion. They’ll be followed by professional services firms and bankers, which will spend $18.1 billion and $16.7 billion, respectively.

Process manufacturers, which build products based on formulations and recipes, and the retail industry will both spend about $10 billion on cloud services in 2018, according to IDC.

In addition to cloud primary markets (systems, applications, storage, and more), IDC broke down how spending will progress across smaller secondary markets between 2016 and 2021. The researcher said that Data Management Software spending will grow over the period by a compound annual growth rate of 38.1 percent. It will be followed by Basic Storage at 32.2 percent, Application Development Software at 31 percent, Server at 31 percent, and Data Access and Analysis at 28.1 percent compound annual growth rates.